Legal Battles on British Online Gambling Law

The proposed revisions made by the British government in respect to the online gambling law have a mandatory stand still period according to the European Commission. This period has ended and therefore, the affected gambling jurisdictions are getting ready for the legal battle. The European Commission must be notified whenever governments want to make material changes to their online gambling laws. Besides that, a draft law must be provided and in such cases a stand still period is enforced during which the proposed legislation cannot be enacted.

In the case of the United Kingdom, the stand still period was extended because there were complaints received from affected jurisdictions like Gibraltar and Malta. But that extended period is also over and therefore, the government in London will initiate the implementation of secondary licensing and point-of-consumption tax on online and mobile casino operators accessing the British gambling market. Online casino companies that do not comply with these new regulations will have its services blocked.

The whole story begins four years ago, when several leading British online gambling operators relocated to offshore jurisdictions like Malta and Gibraltar. The lower taxes in these jurisdictions enabled operators to compete with other foreign offshore operators that were also servicing the British online gambling market. For this reason, the United Kingdom government began to lose revenue on a large scale and began to analyze different options and craft new laws meant to plug this leak. Analysts on the online gambling market have estimated that the loss has been estimated over four years at more than £1 billion. The lawmakers in London believe that after the implementation of the law it would become counterproductive for the British operators to function from offshore jurisdictions and pay double taxes.

Gibraltar and Malta fear an exodus and for this reason these two jurisdictions have been opposing the proposed British law. Gibraltar-based online gambling operators have raised a fighting fund of £500,000 to contest the issue in court on the basis of European Union law. The basis is that Britain’s plans are not legal because they would offer an unfair advantage to online gambling operators that are physically located in the UK.